November 22, 2001 - Tobacco Company Can Continue Suit Against R.J. Reynolds

A small, Virginia-based tobacco company's patent infringement lawsuit against the nation's second-largest cigarette maker can proceed, a federal judge in Maryland ruled this week.

In an opinion issued late Tuesday, U.S. District Court Judge Alexander Williams Jr. rejected R.J. Reynolds Tobacco Co.'s motion to dismiss a lawsuit brought by Star Scientific Inc., a Chester-based maker of discount cigarettes and smokeless tobacco.

The lawsuit claims that Reynolds violated Star's patent on a tobacco-curing process designed to prevent the formation of nitrosamines, cancer-causing chemicals that form in tobacco leaves when they are cured in heated barns after harvest.

The case could have an enormous impact on the U.S. tobacco industry because cigarette companies, under pressure from public health groups to remove toxins from tobacco products, are switching to low-nitrosamine tobacco. Thousands of farmers in Virginia and other states have changed their tobacco-curing methods to meet demand for the leaf.

Star received a patent on its curing process in March. The company says it developed the technique first, and it wants other companies to pay royalties.

In the lawsuit filed in May, Star claims that Winston-Salem, N.C-based Reynolds violated the patent by contracting with tobacco growers and requiring them to install heat exchangers in their curing barns to retard the formation of nitrosamines. The lawsuit seeks an injunction and unspecified financial damages.

R.J. Reynolds has argued that the curing method is not new, but simply a shift back to the way farmers cured their tobacco years ago, before modern, direct-heat curing barns were introduced.

Reynolds argued that the suit should be dismissed because no infringement occurred between the time Star's patent was approved and the time the suit was filed. The judge rejected that argument, saying that Reynolds may have induced or contributed to patent infringement by accepting contracts with farmers for low-nitrosamine tobacco.

"We believe that we're going to get a trial on the merits now," said Paul Perito, Star's chairman and chief operating officer. "That's what we want; we want to get a case before a group of jurors and let them decide."

In the lawsuit, Star also charges that Reynolds and other tobacco companies have long known about the presence of nitrosamines in cigarettes but made no serious attempt to prevent them until Star introduced its technology.

Reynolds sought to have those allegations stricken as inflammatory and irrelevant, but the judge rejected the motion, saying that the charges "directly relate to RJR's motivation to infringe" the patent.

A Reynolds spokeswoman declined to comment yesterday, saying the company had not had time to review the ruling.

Star uses low-nitrosamine tobacco in its cigarettes and in two smokeless tobacco products the company introduced this year.

Nitrosamines are thought to be among the most potent carcinogens in tobacco, but cigarette smoke contains at least 40 cancer-causing agents, and health experts say there is no proof that reducing nitrosamines lessens the risks of smoking.

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